JC PENNEY’S BRINGS DIY COMPETITION TO HOME DEPOT, LOWE’S, BEST BUY AND SEARS

JC Penny’s announced Monday that they will be doing a major expansion into home appliances. Starting in July, JC Penney’s will add an appliance showroom to almost 500 of its stores. The showrooms will feature kitchen and laundry appliances from Samsung, LG, GE Appliances, and Hotpoint, with over 100 appliances on display.

“Since launching major appliances in 22 stores last February, the response has been outstanding,” said Marvin R. Ellison, CEO, JC Penney’s. “The pilot confirmed that we should not limit our business to apparel and soft home in order to achieve significant revenue growth.”

The retailer also plans to allocate additional 25% of floor space to window coverings in about 500 stores, and pilot a new furniture line, Signature Design by Ashley, from Ashley Furniture, in 25 stores.

JC Penney’s is also testing an in-store flooring concept with Empire Today in stores in Tampa, Florida, and Washington, D.C., beginning this summer. "The current housing market presents a lucrative opportunity to diversify our Home assortment and strategically align with consumer spending patterns,” Ellison said.  “By combining our soft home and window coverings merchandise with the industry`s leading brands for appliances, furniture and flooring, JCPenney will become a destination for home design and redecorating, allowing us to weather-proof our business during seasonal periods of the year."

Source: Chain Store Age

J.C. Penney is Expanding it’s Relationship With Sephora

J.C. Penney’s successful 10-year relationship with global beauty brand Sephora is expanding. Sephora currently has over 1,780 locations in 29 countries including 370 in North America and 546 in-store shops inside J.C. Penney stores. The department store retailer announced that it will open 60 additional Sephora shops in Penney stores by June 17^th. Among the new shops will be a 3000 s. ft. flagship shop located in the newly relocated Penney at Northridge Mall in Salinas, CA. It will feature a larger assortment of emerging brands, merchandise displays and expanded room for service.

When Sephora made its debut inside J.C. Penney in 2006, it was a new concept.   

“J.C. Penney was one of the first department store retailers to forgo the traditional beauty counter and work with a global beauty brand to build a dynamic Sephora shop inside its stores,” Angela Swanner, senior VP for Sephora inside J.C. Penney. “Ten years and nearly 600 locations later, Sephora inside J.C. Penney has become a leading beauty destination that will continue to be a growth driver in 2016 and beyond."

The Penney-Sephora partnership isn’t limited to physical stores. Sephora also has a significant online presence on Penney’s e-commerce site.

Source: Chain Store Age

Study Shows Department Stores Should Close Locations to Restore Productivity

According to new research by Green Street Advisors, department stores need to close hundreds of locations to recapture the level of productivity they had a decade ago in 2006. The real-estate research firm estimates that approximately a fifth of all anchor space in U.S. malls, or roughly 800 stores, could be a part of the closures.

As retail business has shifted to discounters or online merchants like Amazon.com in recent years, many large retailers have closed locations. Sears recently said it would close 78 stores including 68 Kmarts this summer as part of a plan that was announced in February. But according to Green Street, Sear would need to close 300 or 43% of its stores to regain the sales per square foot that it had in 2006.

To return to 2006 productivity levels, Green Street estimates that JC Penney would need to close 320 stores (31%), Nordstrom Inc. would need to close 30 stores (25%) and Macy’s, which closed 40 stores last year, would need eliminate an additional 70 stores (9%). 

Sales at U.S. department stores averaged $165 per square foot in 2015 which represents a 24% drop since 2006. But stores only reduced their physical footprint by a total of 7% over the same time period.

“Department stores used to be a great catchall for different brands, but today many of the brands have stores of their own, and shoppers can also find them online,” said DJ Busch, a senior Green Street analyst.

The stores have declined to comment on the Green Street Report, but have indicated that closing a large number of stores isn’t the right strategy to improve productivity in today’s dynamic retail market.

“There’s a misperception out there that when we close a store, that business transfers online,” Ed Record, Penney’s chief financial officer, told analysts in November. “When we close a store, particularly in a small market, we see our dot-com business go down.”

Macy’s has attempted to lure shoppers into their stores by adding Bluemercury beauty shops and Backstage discount stores to it’s department stores, and a spokesman for Nordstrom said that all of its stores are profitable, and closing stores “is not our normal practice.”

Source: The Wall Street Journal

J.C. Penney Reports Strong Q4 Sales and Reveals “Penney Days” Promotion

Last Thursday, J.C. Penney announced impressive increases in same-store sales and earnings, as well as a new marketing campaign called Penney Days.

For the fourth quarter ending on January 30th, the retailer announced that same store sales grew 4.1% . “We are very pleased with our performance for the fourth quarter and full year. Our focus on private brands, omni-channel and revenue per customer is clearly resonating as we continue to win market share in a competitive environment," said Marvin R. Ellison, CEO. "We are also pleased that we delivered strong fourth quarter results while effectively managing our inventory, which finished the year up 2.6 %. I would like to thank our over 100,000 associates who embrace our strategy and come to work each day focused on driving sales and providing excellent customer service.”

They also announced a new promotional event called Penney Days. At different times throughout the year they will make limited number of some of their highest rated private brand items available for one cent. The new campaign will give J.C. Penney the opportunity to showcase the company’s assortment of private brands and it will give customers the opportunity to try them for just a penny.  J.C. Penney will promote Penney Days through television spots, weekly sales circulars and digital marketing. They will also launch a social media campaign reminding users of the power of a penny and will promote the hashtag "#SoWorthIt" with all elements of the campaign.

JCP Turnaround In Holiday Homestretch

November 13, 2014

J.C. Penney is in the final phase of its turnaround and the company's stores are customers' preferred destination for great style, quality and value, according to company CEO Mike Ullman.

Those comments came after J.C. Penney said its third quarter same store sales were flat and it forecast a fourth quarter comp increase of 2% to 4%.  Total sales in the quarter ended November 1 declined slightly to $2.76 billion from $2.78 billion.

The company reported an operating loss of $54 million, but that was a massive improvement from the prior year when the company reported a staggering operating loss of $401 million.  Other positives from the quarter were gross margins which expanded to 36.6% of sales, compared to 29.5% in the same quarter last year, thanks to strength in the home and fine jewelry categories.  The company also reduced expenses and reduced inventories by 10.4%.

"This quarter shows the progress we are making in the final phase of J.C. Penney's turnaround.  We continued to significantly improve the profitability of our business with gross margin expansion of 710 basis points, a $342 million improvement in EBITDA and bottom-line financial results that exceeded even our own expectations," Ullman said.  "Like most retailers, following a strong start to the back-to-school season, sales did slow in September and October as unseasonably warm weather hindered the sale of fall goods."

Ullman's observation on the third quarter was that during what he called "appointment shopping periods" such as back to school and holidays, J.C. Penney is the customers' preferred destination for discovering great style, quality and value.

"This year, we are confident customers will once again choose J.C. Penney for meaningful holiday gifts that fit their family budget.  We are well positioned to complete this holiday season and I would like to thank our associates for their hard work, warrior spirit and commitment to delivering an exceptional customer experience every day," Ullman said.

Source: Retailing Today

JCP Picks A President And Eventual CEO

October 13, 2014

Home Depot EVP Marvin Ellison will become president of J.C. Penney on November 1 and succeed Mike Ullman as CEO of the department store retailer next August.

Ellison, 49, is an interesting choice for a retailer focused on apparel and accessories given his extensive background in operations as opposed to merchandising.  He spent the past 12 years at Home Depot and most recently served as EVP of stores since 2008.  Prior to his current role he served as president of Home Depot's northern division and also held the role of SVP of global logistics.  Before Home Depot, Ellison spent 15 years in a variety of operational roles at Target including corporate director of asset protection.  Ellison serves on the board of FedEx and earned a business administration degree in marketing from the University of Memphis and an MBA from Emory University.

Plans call for Ellison to replace Ullman as CEO on August 1, 2015 at which time Ullman will become executive chairman of the board for a one year period.

"The Board has completed its search for the right CEO to lead the next stage of J.C. Penney's growth.  We are delighted to have found that person in Marvin Ellison, a highly accomplished retail executive with a history of delivering top and bottom line results at major American retailers," said J.C. Penney chairman Thomas Engibous.  "He brings to the role, among other assets, an extensive knowledge of store operations and supply chain management as well as a demonstrated ability to successfully run large retail organizations.  In light of these attributes, we believe he is well equipped to return the company to profitable growth."

Engibous also spoke highly of Ullman's contributions, noting that he agreed to return to the company during the most difficult period in its history.  Ullman is credited with stabilizing the business and improving performance after the company attempted an ill-fated transformation under the leadership of prior CEO Ron Johnson.

"(Marvin Ellison's) experience and leadership are exactly what we need to accelerate the progress we have made over the last 18 months," Ullman said.  I look forward to working closely with him and the rest of our outstanding team in the coming months to ensure a smooth transition and a successful future for J.C. Penney."

Ellison added, "as president and, ultimately, CEO, I will be focused on positioning the company to compete in a rapidly changing retail environment for the benefit of our customers, shareholders, suppliers and associates.  I am confident that we have the customer proposition, the brand, and the talent to make J.C. Penney successful over the long term."

Source: Retailing Today

Rebound For Real At JCP

August 14, 2014

Same store sales growth of 6% and e-commerce strength helped J.C. Penney dramatically reduce its second quarter operating loss and demonstrate growing momentum of its turnaround.

Sales at the operator of 1,060 stores increased to $2.8 billion from $2.66 billion and the 6% comp increase the company reported was against an easy prior year comparison when comps declined 11.5%.  Online sales through jcp.com were $249 million for the quarter, up 16.7% versus the same period last year.

The company reported an operating loss of $70 million that, while sizable, was dramatically less than a prior year loss of $395 million.  The company's net loss of $172 million, or 56 cents a share, was also markedly better than the prior year loss of $586 million, or $2.66 a share.

"Our turnaround initiatives continue to produce improved financial results.  In the second quarter, we gained additional market share while significantly increasing gross margin in a highly competitive promotional environment," said J.C. Penney CEO Mike Ullman.  "Our customers know they can count on J.C. Penney to deliver relevant stylish merchandise at a price that fits their budget.  With our unique assortment of powerful private brands, key national brands and exclusive attractions - all at prices customers can afford - we expect to continue driving profitable sales this back to school season.  As we approach the completion of our turnaround, we are focused on re-establishing J.C. Penney as the premier shopping destination for the moderate consumer."

The company singled out women's and men's apparel and accessories, home and fine jewelry as its top performing businesses during the quarter.  Sephora inside J.C. Penney also continued its strong performance, according to the company.

Looking ahead, J.C. Penney said it expects third quarter comps to grow in the mid single digit range.

Source: Retailing Today

Resurgent JCP Reports Surprisingly Strong Sales

May 15, 2014

Things took a wacky turn in the retail world this week as JCPenney reported a 6.2% same store sales increase and a huge gross margin expansion while Macy's, Kohl's and Walmart stumbled.

JCPenney still lost money, lots of it, during the quarter ended May 3, but total sales increased 6% to $2.8 billion.  The 6.2% same store sales increase the company reported was the result of sequential improvement throughout the quarter and broad-based strength across categories.  The comp increase would have been even stronger had the company employed a new method of calculating results that exclude temporary impacts it plans to use going forward.  For example, certain items such as sales return estimates and liquidation sales will now be excluded from same store sales calculation.  Had this methodology been applied during the first quarter, JCPenney would have reported a 7.4% comp increase rather than a 6.2% gain.

In addition to a same store sales surprise, gross margins expanded by 230 basis points to 33.1% of sales from 30.8% last year despite the negative effects of clearance activity.

"We are very pleased to report that JCPenney delivered its second consecutive quarter of comparable store sales growth, as well as continued gross margin improvement.  It is clear that our efforts to re-merchandise many areas of the store and revamp our messaging to the customer are taking hold," said JCPenney CEO Myron Ullman.  "Despite a difficult retail environment, our strong performance during the Easter holiday period and other key promotional events enabled us to deliver better than anticipated sales results.  We expect to carry this momentum into the second quarter as we continue to position the company for long-term profitable growth."

Women's and men's apparel, home, and fine jewelry were the company's top performing merchandise divisions in the quarter and Sephora inside JCPenney also continued its strong performance, according to the company.  Geographically, all regions delivered sales gains over the same period last year with the best performance in the western and central regions of the country.

Lest anyone get carried away with the company's performance, it is worth noting JCPenney was cycling against a prior year comp decline of 16.6% and it continues to report sizable losses.  The operating loss during the first quarter was $247 million, which was roughly half the prior year loss of $486 million.  A net loss of $352 million was worse than the prior year net loss of $348 million.

The other noteworthy development announced in conjunction with the release of first quarter results involved a new $2.35 billion credit facility to replace an existing $1.85 billion line of credit.

"With a solid plan in place to complete the turnaround, we are pleased with the support of our banking partners and their confidence in our ability to succeed," Ullman said.

Looking ahead, JCPenney expects a second quarter comp increase in the mid-single digits at its 1,100 stores and significant full year gross margin improvement.

Source: Retailing Today

J.C. Penney's Q4 Shows Signs Of Progress

February 26, 2014

In a sign of some progress in its turnaround efforts, J.C. Penney reported a net profit of $35 million for the fourth quarter ended February 1, compared to a loss of $552 million a year ago.  Excluding a tax benefit and other items, Penney had a loss of $206 million for the quarter.

Looking forward, the company expects same store sales to increase approximately 3% to 5% for the first quarter and to increase mid-single digits for the full year 2014.

Net sales for the quarter fell 2.6% to $3.78 billion from $4.88 billion in the year ago quarter, which included an additional 53rd week.  Analysts had expected $3.85 billion.

Same-store sales rose 2% for the quarter, with holiday sales up 3%.  Online sales were $381 million for the quarter, up 26.3% versus the same period last year, excluding the 53rd week.

The company's top performing merchandising divisions were home, men's apparel, women's accessories and Sephora.

"J.C. Penney achieved what it set out do to on a number of important fronts in 2013," said CEO Myron Ullman.  "We stabilized our business, both financially and operationally, and restored our process disciplines, promotions, inventory levels and focus on the customer.  As a result, we generated positive comparable store sales in the fourth quarter and ended the year with more than $2 billion in total available liquidity."

For the full year, the company reported an operating loss of $1.42 billion, which includes $215 million of restructuring and management transition charges.

Ullman said the retailer's turnaround is gaining momentum.  "With the most challenging and expensive parts of the turnaround behind us, we will focus on improving gross margin, managing expense and steadily growing our sales in 2014.  Our strategic plan seeks to enhance performance across all of the key drivers of our business: merchandising, marketing, store experience, jcp.com, our teams, and our operations.  The goal is to deliver consistently improving financial results, and to restore J.C. Penney as a leader in American retail."

Source: Retailing Today

JCP Scores First Quarterly Gain Since 2011

February 4, 2014

J.C. Penney scored its first positive quarterly sales result since 2011, reporting a same store sales increase of 2% in the fourth quarter, which included the holiday season.

"While 2013 brought a lot of change and challenges to J.C. Penney, the steady improvements in our business show that the company's turnaround is on track.  In spite of the significant headwinds facing all retailers this season, including unprecedented harsh weather conditions in many parts of the country, we delivered on our promise to generate positive comparable store sales growth in the fourth quarter," said CEO Myron E. Ullman.

Same-store sales increased 3.1% in the nine weeks through November and December.  The increase was fueled by solid performances in beauty (Sephora), activewear, sweaters, outerwear, dresses, boots, men's clothing, luggage and housewares.

"As we look ahead to 2014, our associates are encouraged by the company's results and we remain steadfast in our focus to build on these achievements and return to profitable growth," Ullman added.

The company said it closed its 2013 fiscal year with total available liquidity in excess of $2 billion.

Source: Retailing Today

JC Penney EDI 852 Reporting

If you are a vendor supplying to JC Penney, you are eligible to receive product sales activity and inventory data via EDI 852. Preparing to setup and receive the EDI 852 files can be confusing, and creating usable reports for your team can be very time consuming. Fortunately, Accelerated Analytics® provides a simple, outsourced service for all your JC Penney EDI 852 reporting needs.

Using Accelerated Analytics® makes all your reporting headaches go away. With Accelerated Analytics®, we handle all the data conversion, database hosting and reporting. We even provide training and the end user reporting tools. 

Accelerated Analytics® benefits:

• Eliminate manual data entry and manipulation
• Consolidate all JC Penney store data on all your SKU's into one reporting database
• Pre-built exception reports with color coded dashboards
• No software or hardware to purchase
• Sophisticated charts and graphs

Available reports:

• This weeks sales and inventory by store and SKU
• Last weeks sales and inventory by store and SKU
• This months sales and inventory by store and SKU
• 6 week rolling sales and inventory by store and SKU
• Sell-thru
• Inventory turns
• Days supply on hand

Accelerated Analytics® will give you the ability to anticipate changes in sales and inventory, so you can make adjustments before a costly mistake occurs. Our EDI 852 reporting is the best on the market. 

JCP Bets Big on IT

JCP is boosting IT spending again this year, even as it cuts back on other capital spending.  JCP spent $139 million on technology last year (23% of cap ex).  The focus will be on supply chain improvements and growth in eCommerce.  JCP expects the Internet to deliver $1 billion in sales over the next five years.  I've heard CIO's comment before that CEO's don't 'get it' when it comes to technology, but this one certainly seems to get it... "This is the next generation of how to make things better and how to be a better competitor," says Chief Executive Myron E. Ullman III. "People who are going to survive are working on this."

Technology certainly can be a way to reduce expenses through greater efficiency, but is technology a viable business growth strategy?